UAE?s new visa rule is likely to improve the business of real estate business. Once implemented, the residents of Dubai will be issued visas based on their property ownership. The new rule will bring about a push to the realty sector, which is recovering after the global crisis. However, realtors are worried about the costs involved. The move will increase the costs in setting up a company, which also includes its maintenance and ownership fees, and registering the property in buyer?s name. The costs?for setting up a company to register the property under it will now be Dh40,000. Yet, some analysts believe that this could attract foreign customers coming to UAE.
The new mechanism requires the owner to establish a company in the free zone area. The company can own the property, which will automatically entitle the property owner to obtain a residence permit on the basis of ownership of the company. But the property owners also must satisfy certain criteria to establish the company. The validity of the residence visa is linked to the ownership of the company. Thus, if the owner sells his or her property, the trade licence and the residence visa will also be automatically cancelled. The structure of the law is such that property owner applying for residency is a member of the existing corporate structure and therefore the sponsorship is based on the corporate structure.
However, some analysts say that the law is not a permanent solution to the real estate problems in Dubai.